BILL NUMBER: SB 685	CHAPTERED  09/07/99

	CHAPTER   348
	FILED WITH SECRETARY OF STATE   SEPTEMBER 7, 1999
	APPROVED BY GOVERNOR   SEPTEMBER 7, 1999
	PASSED THE SENATE   AUGUST 19, 1999
	PASSED THE ASSEMBLY   JULY 15, 1999
	AMENDED IN ASSEMBLY   JUNE 15, 1999
	AMENDED IN SENATE   APRIL 5, 1999

INTRODUCED BY   Senator Monteith
   (Principal coauthor:  Senator Poochigian)
   (Coauthor:  Senator Johannessen)
   (Coauthors:  Assembly Members Battin, Campbell, House, Leach,
McClintock, Oller, Robert Pacheco, Strickland, and Zettel)

                        FEBRUARY 24, 1999

   An act to add Sections 19225 and 21015.5 to the Revenue and
Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 685, Monteith.  Taxation:  administration.
   The Katz-Harris Taxpayers' Bill of Rights Act provides for a
Taxpayers' Right Advocate and requires the Franchise Tax Board to
mail various notices to taxpayers.
   This bill would require the Franchise Tax Board to provide a
taxpayer with written notice, as provided, of a state tax lien under
either the Personal Income Tax Law or Bank and Corporation Tax Law,
and require the Taxpayers' Rights Advocate to establish procedures
for administrative review as described in that notice.  This bill
would also prohibit the Franchise Tax Board from levying upon any
property or property right unless that board has provided the
relevant taxpayer with written notice of certain administrative
review rights, and would require the Taxpayers' Rights Advocate to
establish procedures for this administrative review.  This bill would
further provide that if the Franchise Tax Board holds in abeyance
the collection of a liability imposed under the Personal Income Tax
Law or related administrative provisions, that is final and otherwise
due and payable, for a period in excess of 6 months from the date
the hold is first placed on the account, the board shall mail to the
taxpayer a final notice of tax due prior to issuing a levy or filing
a notice of state tax lien to collect the amount due.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 19225 is added to the Revenue and Taxation
Code, to read:
   19225.  (a) (1) The Franchise Tax Board shall notify in writing
the person described in Section 19221 of the filing or recording of a
notice of state tax lien as provided under Chapter 14 (commencing
with Section 7150) or Chapter 14.5 (commencing with Section 7220) of
Division 7 of Title 1 of the Government Code.
   (2) The notice required under paragraph (1) shall be mailed in
accordance with Section 2885 of the Civil Code no less than five
business days after the day of the filing of the notice of lien.
   (3) The notice shall specify, in simple and nontechnical terms,
all of the following:
   (A) The amount of unpaid tax.
   (B) The right of the person to request a review during the 15-day
period beginning on the day after the five-day period described in
paragraph (2).
   (C) The independent departmental administrative review available
to the taxpayer with respect to the lien and the procedures to obtain
that review.
   (D) The procedures relating to the release of liens on property.
   (b) (1) The Taxpayers' Rights Advocate shall establish procedures
for an independent departmental administrative review requested under
subparagraph (C) of paragraph (3) of subdivision (a).
   (2) A person shall be entitled to only one review under this
section with respect to the taxable period to which the unpaid tax
specified in subparagraph (A) of paragraph (3) of subdivision (a)
relates.
   (3) An independent departmental administrative review under this
subdivision shall be conducted by an officer or employee, or officers
or employees, who have had no prior involvement with respect to the
unpaid tax specified in subparagraph (A) of paragraph (3) of
subdivision (a) before the first review under this section or Section
21015.5.  A taxpayer may waive the requirement of this paragraph.
Administrative review under this paragraph is not subject to Chapter
4.5 (commencing with Section 11400) of Part 1 of Division 3 of the
Government Code.
   (4) To the extent practicable, a review under this section shall
be held in conjunction with a review under Section 21015.5.
   (c) For purposes of this section, subdivision (c) of Section
21015.5 shall apply.
   (d) This section is operative for any collection action initiated
after the date which is 180 days after the effective date of the act
adding this section.
  SEC. 2.  Section 21015.5 is added to the Revenue and Taxation Code,
to read:
   21015.5.  (a) (1) No levy may be made on any property or property
right of any person unless the board has notified the person in
writing of his or her rights as described in subparagraph (C) of
paragraph (3) before the levy is made.  Except as provided in
subdivision (f), the notice shall be required only once for the
taxable period to which the unpaid tax specified in subparagraph (A)
of paragraph (3) relates.  The notice shall not be required if the
unpaid tax for which notice would otherwise be required under this
paragraph is consolidated for collection purposes with a preexisting
unpaid tax for which notice has been given under this paragraph.
   (2) The notice required by paragraph (1) shall be made by
first-class mail to the address of record not less than 30 days
before the day of the first levy with respect to the amount of the
unpaid tax for the taxable period.  Notice under paragraph (1) is not
required if previous mail to the same address was returned
undelivered with no forwarding address.
   (3) The notice required under paragraph (1) shall specify, in
simple and nontechnical terms, all of the following:
   (A) The amount of unpaid tax.
   (B) A telephone number to call in the event of any questions.
   (C) The right of the person to request a review during the 30-day
period described in paragraph (2).
   (D) The proposed action or actions that may be taken by the
Franchise Tax Board and the rights of the person with respect to the
action or actions, including a brief statement that sets forth all of
the following:
   (i) The provisions of California law relating to levy and sale of
property.
   (ii) The procedures applicable to the levy and sale of property
under California law.
   (iii) The independent departmental administrative review available
to the taxpayers with respect to the levy and sale and the
procedures to obtain that review.
   (iv) The alternatives available to taxpayers that could prevent
levy on property, including installment agreements under Section
19008.
   (v) California legal requirements and procedures with respect to
the release of levy.
   (b) (1) The Taxpayers' Rights Advocate shall establish procedures
for an independent departmental administrative review for taxpayers
who request review under subparagraph (C) of paragraph (3) of
subdivision (a).
   (2) A person shall be entitled to only one review under this
section with respect to the taxable period to which the unpaid tax
specified in subparagraph (A) of paragraph (3) of subdivision (a)
relates.
   (3) An independent departmental administrative review under this
subdivision shall be conducted by an officer or employee, or officers
or employees, who have had no prior involvement with respect to the
unpaid tax specified in subparagraph (A) of paragraph (3) of
subdivision (a) before the first review under this section or Section
19225.  A taxpayer may waive the requirement of this paragraph.
Administrative review under this subdivision is not subject to
Chapter 4.5 (commencing with Section 11400) of Part 1 of Division 3
of the Government Code.
   (c) (1) The person or persons conducting the independent
departmental administrative review shall obtain verification that the
requirements of any applicable law or administrative procedures have
been met by the board.
   (2) The taxpayer may raise during the review any relevant issue
relating to the unpaid tax or the lien, including any of the
following:
   (A) Appropriate spousal defenses.
   (B) Challenges to the appropriateness of collection actions.
   (C) Offers of collection alternatives, that may include the
posting of a bond, the substitution of other assets, an installment
agreement, or an offer-in-compromise.
   (3) The determination of the person or persons conducting the
review under this subdivision shall take into consideration all of
the following:
   (A) The verification presented under paragraph (1).
   (B) The issues raised under paragraph (2).
   (C) Whether any proposed collection action balances the need for
the efficient collection of taxes with the legitimate concern of the
person that any collection action not be more intrusive than
necessary.
   (4) An issue may not be raised during the review if:
   (A) The issue was raised and considered at a previous review under
this section or in any other administrative or judicial proceeding.

   (B) The person seeking to raise the issue participated
meaningfully in the review or proceeding.
   This paragraph does not apply to any issue with respect to a
change in circumstances of that person that affects the
determination.
   (d) If review is requested under subparagraph (C) of paragraph (3)
of subdivision (a), the levy actions that are the subject of the
requested review shall be suspended for the period during which the
review is pending.  In no event shall any period expire before the
15th day after the day upon which there is a final determination in
the review.
   (e) This section does not apply if the board has made a finding
under Section 19081 or Section 19082 that the collection of tax is in
jeopardy except that the taxpayer shall be given the opportunity for
the review described in this section within a reasonable period of
time after the levy.
   (f) If the board holds in abeyance the collection of a liability
imposed under Part 10 (commencing with Section 17001) or Part 10.2
(commencing with Section 18401), that is final and otherwise due and
payable, for a period in excess of six months from the date the hold
is first placed on the account, the board shall thereafter mail to
the taxpayer a notice prior to issuing a levy or filing or recording
a notice of state tax lien.
   (g) This section is operative for collection actions initiated
after the date which is 180 days after the effective date of the act
adding this section.
